Strafford - CLE (Mortgage Servicing)

Presenting a live 90-minute webinar with interactive Q&A
Residential Mortgage Servicing and

Foreclosure Challenges in an Evolving
Regulatory and Litigation Environment
Navigating Foreclosure Re-Filings, Hearsay Objections, Post Servicing
Transfers, Loss Mitigation, FDCPA and TCPA Developments, and More
TUESDAY, DECEMBER 16, 2014
1pm Eastern
12pm Central | 11am Mountain
10am Pacific
Todays faculty features:

Christy A. Ames, Member, Stites & Harbison, Louisville, Ky.
Brian Blake, Counsel, MERSCORP Holdings, Reston, Va.
Hunter R. Eley, Managing Partner, Doll Amir & Eley, Los Angeles
Reid S. Manley, Partner, Burr & Forman, Birmingham, Ala.
Andrew K. Stutzman, Partner, Stradley Ronon Stevens & Young, Philadelphia
Ralph T. Wutscher, Principal, McGinnis Wutscher Beiramee, Chicago
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Hot Issues in Foreclosure Litigation:

The Statute of Limitations, Res Judicata,
and Prior Servicer Business Records
Reid S. Manley
Partner Birmingham, Alabama
Statute of Limitations:
Statute of Limitations, Fla. Stat. 95.11:
Actions other than for recovery of real property
shall be commenced as follows:
...
(2) Within five years.
(c) An action to foreclose a mortgage.

Fla. Stat. 95.031 states that the statute of
limitations runs from the date the cause of action
accrues.
Fla. Stat. 95.031 provides that (1) A cause of
action accrues when the last element
constituting the cause of action occurs.
5
Statute of Repose:
Statute of Repose, Fla. Stat. 95.281

(1) The lien of a mortgage or other instrument encumbering real property,
herein called mortgage, except those specified in subsection (5), shall
terminate after the expiration of the following periods of time:
(a) If the final maturity of an obligation secured by a mortgage is ascertainable
from the record of it, 5 years after the date of maturity.
(b) If the final maturity of an obligation secured by a mortgage is not
ascertainable from the record of it, 20 years after the date of the
mortgage, unless prior to such time the holder of the mortgage:
1. Rerecords the mortgage and includes a copy of the obligation secured by
the mortgage so that the final maturity is ascertainable; or
2. Records a copy of the obligation secured by the mortgage from which copy
the final maturity is ascertainable and by affidavit identifies the mortgage
by its official recording data and certifies that the obligation is the
obligation described in the mortgage;
in which case the lien shall terminate 5 years after the date of maturity.
Landmark: Singleton v. Greymar
Cite: 882 So.2d 1004 (Fla. 2004)

Significance: Landmark Florida Supreme Court decision on accrual of
causes of action for foreclosure.
Facts: foreclosure action is brought, and dismissed with prejudice as
sanction for failure to appear at a case management conference. Second
successive foreclosure action is commenced alleging defaults which
occurred subsequent to the prior dismissed foreclosure action. Trial Court
entered foreclosure judgment over argument of borrower that res judicata
prevented the second foreclosure.
Holding: We conclude that the doctrine of res judicata does not
necessarily bar successive foreclosure suits, regardless of whether or not
the mortgagee sought to accelerate payments on the note in the first suit. In
this case the subsequent and separate alleged default created a new and
independent right in the mortgagee to accelerate payment on the note in a
subsequent foreclosure action.
Critical distinction: While it is true that a foreclosure action and an
acceleration of the balance due based upon the same default may bar a
subsequent action on that default, an acceleration and foreclosure
predicated upon subsequent and different defaults present a separate and
distinct issue.
Singletons Progeny: U.S. Bank v. Bartram
Cite: 140 So. 3d 1007 (Fla. 5th DCA 2014)

Significance: Applied the Florida Supreme Courts Singleton
opinion in context of the statute of limitations.
Facts: foreclosure action is brought, and dismissed for failure to
appear at a case management conference (a disturbingly common
fact pattern). Borrower seeks to quiet title based on the statute of
limitations having expired subsequent to the dismissal of the
foreclosure lawsuit.
Holding: Based on Singleton, a default occurring after a failed
foreclosure attempt creates a new cause of action for statute of
limitations purposes, even where acceleration had been triggered
and the first case was dismissed on its merits. Therefore, we
conclude that a foreclosure action for default in payments occurring
after the order of dismissal in the first foreclosure action is not
barred by the statute of limitations found in section 95.11(2)(c),
Florida Statutes, provided the subsequent foreclosure action on the
subsequent defaults is brought within the limitations period.
Singletons Progeny:
Evergrene Partners v. CitiBank
Cite: 143 So. 3d 954 (Fla. 4th DCA 2014).

Significance: Applies Singleton and Bartram opinions in the context of
dismissal of quiet title actions.
Facts: Bank voluntarily dismissed foreclosure action. Borrower filed an
action to cancel the mortgage alleging the expiration of the statute of
limitations for mortgage foreclosure rendered the mortgage
unenforceable and therefore a cloud on title.
Holding: While a foreclosure action with an acceleration of the debt
may bar a subsequent foreclosure action based on the same event of
default, it does not bar subsequent actions and acceleration based
upon different events of default. Therefore, the statute of limitations has
not run on all of the payments due pursuant to the note, and the
mortgage is still enforceable based upon subsequent acts of default. A
voluntary dismissal is not an adjudication on the merits and therefore
will not support a claim of res judicata. Therefore, the claims of
acceleration and subsequent acts of default have never been
adjudicated on their merits in this case, and any acts of default still
within the statute of limitations may be raised in a subsequent suit. The
trial court did not err in dismissing Evergrene's complaint.
Singletons Progeny:
2010-3 SFR Venture v. Garcia
Cite: --- So. 3d. ---, 2014 WL 4723515 (Fla. 4th DCA Sept. 24, 2014)
Significance: Clarifies that the holding in Evergrene Partners applies
regardless of whether prior dismissal was with or without prejudice.
Facts: Banks foreclosure action was dismissed with prejudice
because the bank delayed the persecution of its foreclosure action.
HOA secured title to the property through its own foreclosure action.
In second foreclosure action by the bank, HOA moved for summary
judgment on res judicata grounds and counterclaimed to quiet title.
Trial court entered judgment quieting title to the HOA.
Holding: Before us, the bank correctly argues thatregardless of
the adjudication on the merits in the first actionres judicata does
not preclude a subsequent action based on a subsequent default.
Therefore, as the bank correctly asserts, the trial court erroneously
quieted title in that a valid and enforceable mortgage does not
constitute a cloud on title. . . . Because the bank's mortgage may be
enforced through an action alleging a subsequent default, it is a valid
lien and does not constitute a cloud on title to support a quiet title
claim.
10
Unresolved Issues
What subsequent default date should you allege when you refile?
Can you sue for a default which occurred during the
pendency of the prior foreclosure and after acceleration?
Argument would be that you cannot, because the
monthly obligation did not come due because the lender
had elected to accelerate, so while it is an amount due
and owing, there was no breach of the obligation to
make monthly payments during the period of
acceleration which occurred during the pendency of the
dismissed foreclosure prior to dismissal of the action.
Or, do you need to sue for a payment missed subsequent to
the dismissal of the first foreclosure action?
This is the safest: we know this is okay because this is
the facts of Singleton and Bartram.
11
Unresolved Issues Part II
Can you recover the time-barred payments in a subsequent foreclosure action

based on a non-time-barred cause of action?
Substance v. Procedure. Even where the statute of limitations has expired,

the borrower still owes the lender the money as a matter of substantive law
because the statute of limitations has no substantive effect on the parties
underlying contract rights; it merely bars suit on causes of action which are
too old. See Houck Corp. v. New River, Ltd., Pasco, 900 So. 2d 601, 603 (Fla.
2d DCA 2005) (discussing substance vs. procedure distinction as it relates to
statute of limitations for foreclosure and statute of repose).
Therefore, the argument would be that even if an independent suit on timebarred payments is precluded, they could still be recovered as an item of
damages in a suit brought on a non-time-barred right to accelerate.
Is it even worth thinking about if the borrower is not collectable for a deficiency?
Might be unavoidable: You probably need a new notice of default. What will you
provide as the cure amount? Do you ask for the entire arrearage including
payments outside the limitations period, the borrower may say you have overstated
the cure amount and therefore not complied with the mortgage.
Or, do you tell the borrower all the time-barred payments are forgiven and provide
a cure amount which includes only payments due within the last five years? This is
probably the safest if the borrower is not collectable anyway.
12
The Business Records Exception
Exception to Hearsay Rule for Records of Regularly Conducted

Business Activity, Fla. Stat. 90.803(6)
(a) A memorandum, report, record, or data compilation, in any form, of
acts, events, conditions, opinion, or diagnosis, made at or near the
time by, or from information transmitted by, a person with
knowledge, if kept in the course of a regularly conducted business
activity and if it was the regular practice of that business activity to
make such memorandum, report, record, or data compilation, all as
shown by the testimony of the custodian or other qualified witness,
or as shown by a certification or declaration that complies with
paragraph (c) and s. 90.902(11), unless the sources of information
or other circumstances show lack of trustworthiness. The term
business as used in this paragraph includes a business, institution,
association, profession, occupation, and calling of every kind,
whether or not conducted for profit.
13
Landmark: WAMCO XXVIII, LTD. V. Integrated

Electronic Environments, Inc.
Cite: 903 So.2d 903 (Fla. 2d DCA 2005)

Significance: First reported decision on the admission of prior servicer
business records in a foreclosure action.
Facts: At foreclosure trial, plaintiff presented business records to substantiate
the amount due and owing. Witness testified that the plaintiff had not serviced
the loan since its inception. Therefore, payment history contained information
received by the Plaintiff from the prior servicer, Bank of America, including the
balance due and owing when plaintiff took over servicing. Plaintiffs testimony
indicated that plaintiff checked this information for accuracy when it
incorporated the information into Plaintiffs records and relied on it in the
ordinary course of business.
Holding: Section 90.803(6) provides that records may be excluded from
evidence if the sources of information or other circumstances show lack of
trustworthiness. Yet here, in admitting exhibit 10, the trial court stated that the
payment history was admitted as a record of WAMCO's but that the Guarantors
had the right to challenge the beginning number. The Guarantors did not
demonstrate, and nothing in the record establishes, that the loan information
WAMCO received from Bank of America was suspect or untrustworthy or that
the balances that WAMCO claimed as due were incorrect.
Critical Distinction: Witness in WAMCO did not seek to authenticate a Bank of
America business record, but rather a WAMCO record that included information
received from Bank of America, and was able to testify that such information
was independently checked for accuracy.
14
Distinguishing WAMCO: Hunter v.

Aurora Loan Services
Cite: 137 So. 3d 570 (Fla. 1st DCA 2014)

Significance: Disapproves of common practice of having current servicer
authenticate copies of documents contained in the servicers loan file which
were created by the prior loan servicer.
Facts: at foreclosure trial, plaintiff presented business records to substantiate
standing and amounts due and owing. Witness employed by current loan
servicer sought to authenticate documents which originally came from prior
servicers and admitted to lacking personal knowledge of important facts about
how the documents.
Holding: Here, Mr. Martin's testimony failed to establish the necessary
foundation for admitting the Account Balance Report and the consolidated notes
log into evidence under the business records exception. Mr. Martin was neither
a current nor former employee of MortgageIT, and otherwise lacked particular
knowledge of MortgageIT's record-keeping procedures. Absent such personal
knowledge, he was unable to substantiate when the records were made,
whether the information they contain derived from a person with knowledge,
whether MortgageIT regularly made such records, or, indeed, whether the
records belonged to MortgageIT in the first place. His testimony about standard
mortgage industry practice only arguably established that such records are
generated and kept in the ordinary course of mortgage loan servicing.
Critical Distinction: Witness in Hunter sought to authenticate the documents
as business records of prior servicer, not a business record of his employer
which contained information received from the prior servicer.
15
Burdshaw v. Bank of New York Mellon
Cite: --- So. 3d. ---, 2014 WL 5099352 (Fla. 1st DCA Oct. 13, 2014)
Significance: Extends the holding in Hunter and removes any doubt that standard industry
practice type testimony will not hold up on appeal to authenticate a prior servicer business record.
Facts: At foreclosure trial, plaintiff presented business records to substantiate amounts due and
owing. Witness employed by current loan servicer sought to authenticate documents which
originally came from prior servicers and admitted to lacking personal knowledge of important facts
about how the documents were created but provided some more specific testimony concerning the
computer system allegedly used by both the prior servicer and current servicer.
Holding: Johnson's only knowledge about the amount due and owing came from her review of
the computer printouts and she had no information about how and when those records had been
prepared or where the data came from. Her testimony that everyone was using the Fidelity
system and they would input any transactions, any adjustments is comparable to the witness'
testimony in Hunter about general mortgage industry practices. Ms. Johnson's assumption that the
original loan amounts would have been input by someone handling the origination of the loan
was merely supposition, based on her general knowledge of ordinary mortgage industry practices,
not any specific knowledge about this debt or the transaction of the information between the
original lender and subsequent servicers, including Suntrust. She was thus unable to show any of
the requirements for establishing a proper foundation for the amounts or the documents she relied
on.
Critical Distinction: Witness in Burdshaw did not provide enough specific testimony to cross the
threshold from the standard industry practice testimony to demonstrating actual knowledge of
prior servicer business practices as would be necessary to authenticate a prior servicers business
records as such.
16
Holt v. Calchas, LLC
Cite: --- So. 3d --- 2014 WL 5614374 (Fla. 4th DCA Nov. 5, 2014)
Significance: First case to examine the issue in the context of a notice of default and
acceleration, making a number of novel holdings on this issue.
Facts: during foreclosure trial, trial judge admitted assignment of mortgage, default
letter, and payment history over hearsay objection. Witness testified that such
records were business records of the prior servicer but testified he had never worked
for prior servicer and was unfamiliar with their policies and procedures.
Holdings:
1. A notice of default is non-hearsay because it is a verbal act, since the parties
contract attaches independent legal significance to the utterance of the notice.
Therefore, the notice can come into evidence for purposes other than the truth of the
matter asserted, rendering it non-hearsay.
2. However, when the notice of default comes in for the truth of the matter asserted,
i.e. as independent evidence the notice was sent in the manner the notice purports
(i.e. the mailing address and date) it is being offered for the truth and is hearsay.
3. An assignment of mortgage is also a verbal act, and therefore non-hearsay. See
Holt, FN 2.
4. Where insufficient evidence is offered to prove performance of conditions
precedent to acceleration, the trial judge may still enter a judgment of foreclosure for
the amounts presently due and owing, without providing for acceleration of the
remaining balance of the debt.
5. Extends holding in Hunter that general industry practice testimony is not sufficient.
17
Possible Solutions for the Prior Servicer

Business Records Conundrum
WAMCO: whenever possible, testimony that a record is the business record of

the current servicer, even though it contains information from the prior servicer,
should be sufficient to authenticate the document. However, the witness must
also be able to testify from personal knowledge how the current servicer keeps
and makes the record, what content in the record comes from information
supplied by the prior servicer, and what steps the current servicer takes to verify
the accuracy of this information and to rely on it in the ordinary course of
business in order to satisfy the four elements of the business records exception.
This generally works best with payment histories, since many judges are now
drawing very fine distinctions which essentially confine WAMCO to its facts.
Chose your witness(es) carefully: your client likely has employees on staff
right now that previously worked for many other loan servicers. By selecting the
correct witness(es), you may be able to locate someone within your client who
can testify from personal knowledge about the prior servicers business
practices who can authenticate the documents you need. Be sensitive to the
time your document appears to have been created, and what department
appears to have created it, and the time/department your potential witnesses
worked for the prior servicer to ensure the best results.
18
Possible Solutions for the Prior Servicer

Business Records Conundrum
Certification by the prior servicer under Fla. Stat. 90.902(11):

This requires cooperation of the prior servicer. Fla. Stat. 90.902(11)
allows a paper certification by the prior servicer to substitute for live
witness testimony authenticating the document as a business
record. It is designed to avoid the hassle and expense of the next
option:
Subpoenaing the prior servicer for trial: This is time consuming

and expensive, can cause friction between industry peers, and there
is no guarantee the witness will show. Even then, you need to be
sure the person who appears has personal knowledge about the
records in question, which further increases the costs as
depositions may be necessary. The one silver lining is that many
banks and loan servicers have personnel on site during the
foreclosure trial cattle calls common throughout Florida, and with
some cooperation and coordination, some of these difficulties can
be alleviated if an experienced witness for the prior servicer will
already be on site to appear in the servicers own foreclosure trial(s)
set on the same trial docket.
19
Questions
Feel free to direct questions to Reid Manley
via email: rmanley@burr.com or to reach out
to a Burr attorney in an office near you:
www.burr.com.
20
Loss Mitigation Litigation Trends

and Loss Mitigation Procedures
Under Regulation X
Your Logo here
Presented by:
Christy A. Ames
Member
Stites & Harbison, PLLC
21
Tweeting about this conference?
Attorneys Soliciting Clients for Loan

Modification Claims
Every situation is different so we
must look at your current situation
to determine the best route for you,
but if you have been through the
Loan Modification process and had
no results or just no answers at all
then litigation might be the solution
for you.
Litigation vs. Modification, MORTGAGE LITIGATOR, http://mortgagelitigator.com/faqsabout-litigation/litigation-vs-modification (last visited September 19, 2014).
22
Emergency Economic Stabilization

Act of 2008
Authorized the Secretary of the Treasury to
implement a plan to assist homeowners and
encourage servicers to minimize foreclosures.
Developed the Home Affordable Modification
Program (HAMP).
23
Early Loan Modification Litigation

Claims routinely dismissed at early stages
No private right of action under HAMP.
Miller v. Chase Home Fin., LLC, 677 F.3d 1113, 1116

(11th Cir. 2012).
No claims as third-party beneficiaries to

SPAs.
Morales v. Chase Home Fin. LLC, 2011 U.S. Dist. LEXIS

49698, at*23-24, 2011 WL 1670045, at *9 (N.D. Cal.
Apr. 11, 2011).
24
Early HAMP Litigation - No Breach

of Contract Under Trial Period Plan
TPP but one step on the road towards
modification.
Pandit v. Saxon Mortg. Servs., 2012 U.S. Dist. LEXIS
133292, at *12, 2012 WL 4174888, at *5 (E.D.N.Y. Sept.
17, 2012).
Even if satisfied TPP conditions, borrower

not guaranteed loan modification.
Stolba v. Wells Fargo, 2011 U.S. Dist. LEXIS 87355, at *8-9,
2011 WL 3444078, at *3 (D.N.J. Aug. 8, 2011).
25
Shift in Loan Mod LitigationThe Wigod Decision

Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th
Cir. 2012)
Appeals court reversed dismissal of state law claims for
breach of contract, promissory estoppel, fraudulent

misrepresentation, and violation of Illinois UDAP statute
regarding TPP agreement
Heavy influence on district court decisions and state court
decisions
Olson v. Merrill Lynch Credit Corp., 576 Fed. Appx

506, 511-12 (6th Cir. 2014) (A plaintiff can only bring
a HAMP-related claim if state law provides.)
26
Wigod Opened Door for

Onslaught of State Law Claims
-----
Breach of contract
Promissory estoppel
Duty of good faith and fair dealing
Negligence
Breach of fiduciary duty
Negligent misrepresentation
Intentional infliction of emotional
distress
Fraud
UDAP
27
Breach of Contract
Is a TPP a contract?
Yes Wigod.
No Reitz v. Nationstar Mortg., LLC, 954 F.
Supp. 2d 870, 885-88 (E.D. Mo. 2013)(holding
that the TPP was not a valid enforceable
contract requiring a permanent mortgage
modification).
28
Breach of Contract TPP Executed?

If not, then no breach of contract.
Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769 (4th
Cir. 2013) (no breach of contract because complaint
arises from a general failure to follow HAMP
guidelines).
An invitation to apply for a TPP does not

create an actionable breach of contract
claim.
Maples v. Bank of Am., N.A., 2014 U.S. Dist. LEXIS
82699, 2014 WL 2769050 (M.D. Ga. June 18, 2014).
29
Breach of Contract All Conditions Satisfied?

Yes If borrower made all payments.
Lazo v. Bank of Am., N.A., 2012 U.S. Dist. LEXIS
69979, at *21 2012 WL 1831577, at *6 (N.D. Cal.
May 18, 2012) (dismissing claim under Rule 8
but holding that borrowers would be entitled to
permanent modification after successfully
making required payments during trial period).
No If borrower did not have a financial

hardship.
Pennington v. HSBC Bank USA, N.A., 493 F. Appx
548, 2012 U.S. App. LEXIS 20605, 2012 WL
4513333 (5th Cir. 2012) (finding no financial
hardship).
30
Breach of Contract Servicers Signature

No contract because the servicer never
signed.
Pennington v. HSBC Bank USA, N.A., 493 F. Appx 548
(5th Cir. 2012).
Goss v. ABN Amro Mortgage Group, 549 Fed. Appx 466
(6th Cir. 2013).
McGann v. PNC Bank, N.A., 2013 U.S. Dist. LEXIS
46484, at *17, 2013 WL 1337204, at *6 (N.D. Ill. Mar.
29, 2013) (Pursuant to the TPP Agreements own
terms, PNCs failure to sign the agreement evidences
that it had no obligation to offer McGann a HAMP loan
modification.).
31
Breach of Contract Consideration

Sufficient consideration:
provide income documentation;
swear under penalty of perjury that [the borrower]
provided truthful financial information; and
agree to credit counseling if required.
Wilson v. SunTrust Mortg., Inc., 2014 U.S. Dist. LEXIS 33016, at *9
(E.D. Va. Mar. 12, 2014)(applying Wigod).
Providing documents is not sufficient

consideration.
Almeida v. U.S. Bank Natl Assn, 2014 U.S. Dist. LEXIS 30319 , at
*19-21(D. Mass. Mar. 10, 2014).
32
Breach
Breach of Contract
Failing to send permanent modification agreement before

or at the end of the three-month period. Young v. Wells
Fargo Bank, N.A., 717 F.3d 224 (1st Cir. 2013); Corvello v. Wells
Fargo Bank, N.A., 728 F.3d 878 (9th Cir. 2013).
Not providing modification because no investor approval,
which was not required under TPP. Johnson v. IndyMac
Mortg. Servicing, 2014 U.S. Dist. LEXIS 55610, 2014 WL
1652594 (D. Mass. Apr. 22, 2014).
Sending foreclosure notices, assessing late fees although
paid in full under TPP, and not crediting account. Wilson v.
SunTrust Mortg., Inc., 2014 U.S. Dist. LEXIS 33016 (E.D. Va. Mar.
12, 2014)(citing Wigod).
No breach
Payments increased from TPP to permanent modification.
Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir. 2013).
33
Breach of Contract - Damages

Higher interest rate
More time needed to payoff loan
Increased principal balance
Would have filed bankruptcy
Late fees
Penalties
Damage to credit
See Wilson v. SunTrust Mortg., Inc., 2014 U.S. Dist. LEXIS 33016
(E.D. Va. Mar. 12, 2014).
34
Promissory Estoppel
Is there a promise ?
Yes TPP is an unambiguous promise.
Freitas v. WFHM, 703 F.3d 436 (8th Cir. 2013) (holding
that the TPP was an unambiguous promise of a
permanent loan modification under HAMP if all trial
period plan payments as set forth in the TPP Contract
were timely made and required documentation was
submitted).
No Subject to maintaining requirements

of TPP.
Pennington v. HSBC Bank USA, N.A., 493 F. Appx 548,
2012 U.S. App. LEXIS 20605, 2012 WL 4513333 (5th Cir.
2012).
35
Promissory Estoppel
Detrimental Reliance
Increased interest
Higher principal balances and service fees
Extended payoff time periods,
Deterred from seeking other remedies
Unaffordable mortgage payments
Damage to their credit
Costs and expenses to prevent or fight
foreclosure
Additional income tax liability
See Williams v. Saxon Mortg. Servs., 2014 U.S. Dist. LEXIS 24494 (E.D. Mich.
Jan. 13, 2014)(denying motion to dismiss promissory estoppel claim).
36
Breach of Duty of Good Faith and

Fair Dealing Claim Allowed
In conjunction with breach of contract claim
Laughlin v. Bank of Am., N.A., 2014 U.S. Dist. LEXIS
79441, 2014 WL 2602260 (D.N.J. June 11, 2014).
Because servicer told borrower it would

stay foreclosure during loan modification
but did not
Rapacki v. Chase Home Fin., LLC, 2012 U.S. Dist. LEXIS
54685, 2012 WL 1340119 (D. Or. Apr. 17, 2012).
37
Breach of Duty of Good Faith and

Fair Dealing No Claim
No contract
Almeida v. U.S. Bank Natl Assn, 2014 U.S. Dist. LEXIS
30319(D. Mass. Mar. 10, 2014).
Servicer not motivated by a desire to gain an

unfair advantage
Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir. 2013).
38
Negligence
Could be barred by economic loss doctrine.
Almeida v. U.S. Bank Natl Assn, 2014 U.S. Dist. LEXIS 30319, *
23(D. Mass. Mar. 10, 2014).
No duty.
No duty between the mortgage holder/servicer.
Almeida, 2014 U.S. Dist. LEXIS 30319 at *24.
HAMP does not create an independent duty of care if there
is no other basis for that duty.
Larivaux v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 79673, at
*18-19, 2013 WL 2467752, at *6 (D. Mass. Jun. 6, 2013).
([C]ourts in this district have repeatedly held that a
plaintiff cannot state a claim for negligence arising out of a
violation of HAMP or its regulations . . . . Because no new
duty of care is established by the HAMP guidelines, plaintiff
has not set forth a plausible claim for negligence.).
39
Breach of Fiduciary Duty - No Duty

No express or implied contract, so no duty
Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769 (4th
Cir. 2013).
Sufficient facts not alleged to show how

relationship differs from the typical
debtor-creditor relationship
Robinson v. Deutsche Bank Natl Trust Co., 2013 U.S.
Dist. LEXIS 50797, 2013 WL 1452933 (E.D.N.C. Apr. 9,
2013).
40
Negligent Misrepresentation
Can State a Claim
False statements - not to worry, loan
modification pending final reset, and
not in danger of losing home
Dresser v. U.S. Bank, N.A., 2014 U.S. Dist. LEXIS 119841
(C.D. Cal. Aug. 27, 2014).
Reliance Undertook no other loss

mitigation options and did not file
Chapter 13 bankruptcy
Pulsifer v. U.S. Bank, N.A. (In re Pulsifer), 2014 U.S. Dist.
LEXIS 1852, 2014 WL 61230 (E.D. Wis. Jan. 8, 2014).
41
Negligent Misrepresentation
Cannot State a Claim
No false statement
Servicer needed more information to process the
application;
No duty of care;
No detrimental reliance; and
No damages
Interest and fees did not arise because of the TPP.
Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769 (4th Cir.
2013); Pennington v. HSBC Bank USA, N.A., 493 F. Appx
548, 2012 U.S. App. LEXIS 20605, 2012 WL 4513333 (5th
Cir. 2012).
42
Intentional Infliction
of Emotional Distress
Not outrageous conduct:
mishandling loan modification application;
threatening foreclosure by phone and in the mail; or
misplacing borrowers personal and financial
information.
Echeverria v. BAC Home Loans Servicing, LP, 900 F.
Supp. 2d 1299, 1304 (M.D. Fla. 2012).
Inconvenience and agitation caused by loan

modification problems is not actionable.
Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir.
2013).
43
Fraud
Not sufficiently pleaded
Not pleaded with particularity under Rule 9(b). Freitas
v. WFHM, 703 F.3d 436 (8th Cir. 2013).
Not more than a sheer possibility. Rutledge v. Wells
Fargo Bank, N.A. (In re Rutledge), 510 B.R. 491 (Bankr.
M.D.N.C. 2014).
No allegation that bank employee knew representation
was false. Topchian v. JPMorgan Chase Bank, N.A., 760 F.3d
843 (8th Cir. 2014).
But heightened pleading standard has been

relaxed
Underlying allegations exploring loss mitigation
alternatives with [plaintiffs], when it was in fact, not
considering them for anything but foreclosure[.]
Claim allowed even though borrowers did not name
specific individuals and dates.
Doran v. Wells Fargo Bank, 2012 U.S. Dist. LEXIS 42805,
2012 WL 1066879 (D. Haw. Mar. 28, 2012).
44
UDAP Claims
Whether there is an actionable UDAP claim
varies by state.
In Massachusetts, a borrower can make a
UDAP claim for a servicers repeated
mistakes during loan modification process
causing loss of equity and damage to credit
score.
Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir.
2013).
Johnson v. IndyMac Mortg. Servicing, 2014 U.S. Dist.
LEXIS 55610, 2014 WL 1652594 (D. Mass. Apr. 22
2014).
45
New Federal Cause of Action to Recover

Under HAMP - Real Estate Settlement
Procedures Act Reg X
Notice of Error
12 CFR 1024.35(d)
Request for Information

12 CFR 1024.36(c)
Wilson v. Bank of America, N.A., 2014 U.S.

Dist. LEXIS 134208 (E.D. Pa. Sept. 24, 2014).
(Allegations of a failure to conduct a reasonable
investigation and to adequately respond to a notice
of error and request for information involving a TPP
is enough to withstand a motion to dismiss of a
RESPA claim).
46
Real Estate Settlement Procedures Act Reg X

Loss Mitigation Procedures -12 CFR 1024.41
Only applicable to loans secured by principal
residence.
Five days to notify the borrower of receipt of the
loss mitigation packet and what additional
information is needed.
If application is received 37 days prior to
foreclosure, the review must be completed within
30 days.
If application is received 90 days prior to
foreclosure, the borrower is entitled to appeal any
loss mitigation determination.
47
Real Estate Settlement Procedures Act Reg X

Loss Mitigation Procedures -12 CFR 1024.41
No foreclosure action unless the loan is more than
120 days delinquent:
Servicer cannot start the process if the borrower
has submitted a complete application unless:
Borrower is notified that no loss mitigation options are
available and all appeals are exhausted;
Borrower rejects all loss mitigation options; or
Borrower fails to comply with the loss mitigation
requirements.
Servicer cannot move for judgment if the

borrower submits a complete application unless:
Borrower is notified that no loss mitigation options are
available and all appeals are exhausted;
Borrower rejects all loss mitigation options; or
Borrower fails to comply with the loss mitigation
requirements.
48
Questions?
Christy Ames
cames@stites.com
49
Strafford Webinars
Residential Mortgage Servicing and Foreclosure Challenges
in an Evolving Regulatory and Litigation Environment
ANDREW K. STUTZMAN
Philadelphia, PA
Tuesday, December 16, 2014
Haynes v. Chase Bank USA, N.A.,

2014 WL 3608891 (Bankr. S.D.N.Y. July 22, 2014)
Claim is an alleged violation of debtors and the class

members' discharges
for failure to correct their credit reports that list their debt,
post-discharge ,
as being only charged off, rather than being discharged
in bankruptcy.
Chase contends that it in fact has no obligation
to revise or correct the credit reporting
that it has previously done.
Stradley Ronon Stevens & Young, LLP
51
Collier on Bankruptcy
"The failure to update a credit report to show that a debt

has been discharged is also a violation of the discharge
injunction if shown to be an attempt to collect the debt.
Because debtors often feel compelled to pay debts listed
in credit reports when entering into large transactions,
such as a home purchase, it should not be difficult to
show that the creditor, by leaving discharged debts on a
credit report, despite failed attempts to have the creditor
update the report, is attempting to collect the debt.
52
First, because Chase,
sold its debt pre-bankruptcy and therefore predischarge, to a third party,

Chase contends that it
neither has an ongoing obligation with respect to
credit reporting under the Fair Credit Reporting
Act,
nor, as it no longer has a debt to enforce, under
Section 524(a) of the Bankruptcy Code.
53
Second, Chase argues that, if,

as it contends,
it has no continuing obligation after the sale of

the debt, prepetition, under the Fair Credit
Reporting Act,
it has no other duties under Section 524(a) of the
Bankruptcy Code.
54
55
Let me address that latter argument first.
The complaint does not specifically assert a claim under the FCRA.
Instead, it asserts a claim specifically under Sections 105(a) and
524(a) of the Bankruptcy Code for violation of the discharge under
Section 727 of the Code.
In essence, then, Chase is asserting that the Fair Credit Reporting
Act has implicitly repealed Section 524(a) of the Bankruptcy Code as
interpreted by the foregoing case law,
or at least circumscribes Chase's duties under Section 524(a) of the
Bankruptcy Code with respect to correcting debtors credit reports.
Of course, the FCRA did not expressly repeal or curtail Section
524(a) of the Bankruptcy Code.
56
Chase's other argument is closely related
having sold its debt

it cannot be seen in a plausible way to have any
interest in continuing to enforce that discharged
debt
and, therefore, not only does it lack an ongoing
FCRA duty to correct the credit reports,
it also cannot be liable under Section 524 of the
Bankruptcy Code, .
57
Chase contends that its last transaction or

experience with respect to plaintiff's debt
was the sale itself to a third party,
pre-bankruptcy
and, thus, pre-discharge,
and, therefore, that it has no obligation to continue to
deal with the credit reporting agencies
to report that the debt is no longer merely charged off,
but, instead, has been discharged through bankruptcy,
or that it has any interest in the debts subsequent
collection.
58
the complaint, if true

states a cause of action against Chase
for breach of the discharge under Sections 727

and 524(a)(2) of the Bankruptcy Code
for intentionally assisting in the collection of
discharged debt by not correcting the debtors
credit reports to reflect that the debt has, in fact,
been discharged.
59
60
There are three theories upon which courts have

refused to entertain nationwide debtor class actions to
remedy discharge violations or have circumscribed
them on a district-by-district basis.
The first is premised upon the notion that the Court's

exercise of jurisdiction over debtors other than the debtor
before it,
or, in some courts, the debtors in its district,
will not lie because that determination does not affect the
lead plaintiff's estate,
its bankruptcy estate,
and there is no related to jurisdiction in respect of the
other debtor class members' claims under 28 U.S.C.
Section 1334(b).
61
Similarly, some courts have dismissed similar national

class actions on jurisdictional grounds based on 28
U.S.C. Section 1334(e),
which states, Only the district court in which a case

under title 11 is commenced or is pending shall have
exclusive jurisdiction of all the property,
wherever located,
of the debtor as of the commencement of such case,
and of property of the estate
and overall claims or causes of action that involve
construction of section 327 of title 11 [which pertains to
the retention and compensation of professionals.]
62
The remaining rationale for the courts that have found a

lack of jurisdiction over nationwide debtor class actions to
address systematic discharge violations, is
that the basis for enforcing the discharge under

Sections 524(a)(2) and 727 of the Bankruptcy
Code
is the individual court's discharge order.
[Thus,] only the issuing court, that is, only the
court issuing an injunction, should have the
power to enforce that injunction.
63
I decline to follow the district only cases
and believe that any particular bankruptcy court

has the power to decide a nationwide class
action
intended to remedy the alleged systematic
violation of the discharge.
That, of course, leaves the issue of whether
class certification itself is appropriate,
and that's left for another day.
64
65
65
Motion for Consolidation and

Appointment of Interim Class Counsel,
October 9, 2014
Haynes v. Chase Bank USA, N.A.,

Bankr. S.D.N.Y., Adv. No. 1308370 (RDD)
Echevarria v. Bank of America Corporation,

Bruce v. Citigroup, Inc.,

Belton v. GE Capital Consumer Lending, Inc.,

66
Andrew K. Stutzman
astutzman@stradley.com
215.564.8008
www.stradley.com
67
MORTGAGE SERVICING HOT TOPICS:
68
TCPA Developments and

FDCPA Liability in Bankruptcy
Strafford Publications
Webinar
December 16, 2014
Ralph T. Wutscher
Principal
rwutscher@mwbllp.com
Admitted to Practice Law in IL
CALIFORNIA
FLORIDA
ILLINOIS
INDIANA
WWW.MWBLLP.COM
OHIO
W A S H I N G T O N, D . C.
69
Disclaimer
This presentation is provided for informational purposes
only, and should not be treated as legal advice.
For more information, please contact the speaker.
70
TCPA
Background
Telephone Consumer Protection Act (47 U.S.C. 227, et seq.)
$500 to $1,500 penalty per call
Telemarketing
Servicing
71
TCPA
S.D. Cal Rejects FCC Interpretation of ATDS
11th Cir. Rules Subscribers Are TCPA Called Parties
Petitions Pending Before the FCC on Called Parties and
Similar Issues
72
TCPA
Marks v. Crunch San Diego, LLC, Case No. 14-cv-00348-BASBLM, 2014 U.S. Dist. LEXIS 152923 (S.D. Cal. Oct. 23, 2014)
An ATDS is equipment that has the capacity (A) to store or
produce numbers to be called, using a random or
sequential number generator; and (B) to dial such
numbers.
See 47 U.S.C. 227(a)(1)
73
TCPA
FCC commentary broadly interpreted the definition of

ATDS as any equipment that has the specified capacity to
generate numbers and dial them without human
intervention regardless of whether the numbers called are
randomly or sequentially generated or come from calling
lists.
See In the Matter of Rules and Regulations Implementing
the Tel. Consumer Prot. Act of 1991, 27 FCC Rcd 15391,
15392 (2012)
74
TCPA
Court holds that the FCC has no authority to modify or
interpret the definition of an automated telephone dialing
system (ATDS)
75
TCPA
Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir.
2014)
Only cellphone subscribers or their agents may give
consent to receive autodialed collection calls to a cell
phone
76
TCPA
2014)
phone
Revocation of consent under the TCPA need not be in
writing, can be oral
77
TCPA
2014)
phone
Revocation of consent under the TCPA need not be in
writing, can be oral
Subscriber need not be charged for the call
78
TCPA
Breslow v. Wells Fargo Bank, N.A., 755 F.3d 1265 (11th Cir.
2014)
Auto-dialed telephone calls intended for a former customer
but received by a cellular telephone subscriber without their
prior express consent violated the TCPA.
79
TCPA
Petitions Pending Before the FCC
Santander Petition for Expedited Declaratory Ruling, CG Docket
02-278 (July 10, 2014)
American Bankers Association Petition for Exemption, CG
Docket 02-278 (Oct. 14, 2014)
Consumer Bankers Association Petition for Declaratory Ruling,
CG Docket 02-278 (Sept. 19, 2014)
Rubios Restaurant, Inc. Petition for Expedited Declaratory
Ruling, CG Docket 02-278 (Aug. 11, 2014)
80
TCPA
Santander Petition for Expedited Declaratory Ruling, CG
Docket 02-278 (July 10, 2014)
Prior express consent cannot be revoked or, alternatively,
the caller may require consumer to revoke consent through
specifically enumerated methods
81
TCPA
American Bankers Association Petition for Exemption, CG
Docket 02-278 (Oct. 14, 2014)
Requesting exemptions for certain consumer alerts
82
TCPA
Consumer Bankers Association Petition for Declaratory Ruling,
CG Docket 02-278 (Sept. 19, 2014)
Complete compliance with TCPAs prior express consent
requirement is impossible because of reassigned mobile
telephone numbers, and the inability to reliably ascertain
the identity of the new subscriber prior to the call or text
message
83
TCPA
Rubios Restaurant, Inc. Petition for Expedited Declaratory
Ruling, CG Docket 02-278 (Aug. 11, 2014)
Requests a bad faith defense that releases companies
from liability if they can show the subscriber of the
reassigned number intentionally delayed or failed to tell the
company that the number had been reassigned.
84

Background
Fair Debt Collection Practices Act (15 U.S.C. 1692, et seq.)
The FDCPA prohibits use of any false, deceptive, or misleading
representation or means in connection with the collection of any
debt. See 11 U.S.C. 1692e.
FDCPA section 1692f prohibits use of unfair or unconscionable
means to collect or attempt to collect any debt. See 11 U.S.C.
1692f.
85
Background
FDCPA rulings are of concern to creditors collecting their own
debts, and collecting debts not in default when obtained:
State and local laws
CFPB Bulletin 2013-07 (July 10, 2013)
CFPB Bulletin 2014-01 (Aug. 19, 2014)
86
FDCPA
11th Circuit Holds that Filing a Proof of Claim on a Time
Barred Debt Violated the FDCPA
Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir.
July 10, 2014)
87
FDCPA
Absent an objection from either the Chapter 13 trustee or a
party in interest, a proof of claim is automatically allowed
under the Bankruptcy Code
See 11 U.S.C. 502(a)-(b) and Bankruptcy Rule 3001(f)
88
FDCPA
Holds that filing a proof of claim on a time barred debt was
unfair, unconscionable, deceptive, and misleading
within the scope of the FDCPA
Rejects argument that filing a proof of claim was not
collection activity aimed at the consumer
89
FDCPA
Crawford decision conflicts with the plain language of the
FDCPA:
Filing of a proof of claim is not debt collection activity within
the meaning of the FDCPA
Filing a proof of claim is neither false, misleading, or deceptive
nor unfair or unconscionable.
90
FDCPA
Conflicts with other Courts of Appeal addressing the issue of
whether filing a proof of claim in bankruptcy can support a
cause of action under FDCPA
91
FDCPA
Conflicts with other Courts of Appeal
Conflicts with every district court in the Eleventh Circuit that
has addressed whether filing a proof of claim can violate the
FDCPA
92
FDCPA
Conflicts with other Courts of Appeal
Conflicts with district courts in the Eleventh Circuit
Conflicts with every reported decision on the issue whether
filing a proof of claim can provide the basis for a cause of
action under the FDCPA
93
FDCPA
The FDCPA should not be read to prohibit acts contemplated
by the Bankruptcy Code
See Kokoszka v. Belford, 417 U.S. 642, 94 S. Ct. 2431
(1974)
94
FDCPA
Ninth Circuit has concluded that FDCPA claim is precluded
where the Bankruptcy Code provides a remedy
See Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 511 (9th
Cir. 2002)
MORTGAGE SERVICING HOT TOPICS:
TCPA Developments and

Thank you for attending
95
The MERS System: How it Works

Brian Blake, Counsel
MERSCORP Holdings, Inc.
What is MERS?
What people commonly refer to as MERS is actually
three very different things:
Mortgage Electronic Registration Systems, Inc.
(MERS)
MERS System
97
Who are we?

MERSCORP Holdings, Inc. (MERSCORP): Operating
company that owns and operates the MERS System.
Mortgage Electronic Registration Systems, Inc. (MERS):
Subsidiary of MERSCORP, sole purpose is to serve as
mortgagee in land records for loans registered on the MERS
System (residential loans) and MERS Commercial
The MERS System: the electronic registry tracking the
servicing rights contracts and ownership of mortgage loans.
98
How the MERS System Works
At closing, contract names MERS the mortgagee as nominee for lender and the lenders successors
and assigns. The mortgage can also be assigned to MERS post-closing.
In tandem with the origination and recording of the MERS mortgage (or assignment of the mortgage
to MERS), the MERS Member registers the loan on the MERS System.
MERS remains the lien holder in the land records whenever transfers of the promissory note or
servicing rights take place between MERS members. These events, which are not recordable in the
public land records, are tracked in the MERS System.
The MERS System is not a system of record nor a replacement for the public land records. No
interests are transferred nor financial transactions occur on the system.
Lender records the mortgage in the

county land records in MERS name
At closing, borrower
signs a mortgage and
promissory note. MERS is
appointed mortgageeas-nominee for the
lender in the mortgage
Lender registers loan information on

the MERS System
Lender sells note; the MERS System

is updated for investor changes
Lender sells servicing; the MERS System is

updated for servicing changes
Borrower looks up servicer

and investor info at
www.mers-servicerid.org
No breaks in chain of
title when transfers
occur because the lien
remains in MERS name
What does MERS do and not do?

MERS does serve as mortgagee of record as nominee
for the lender and its successors and assigns
MERS eliminates breaks in chain of title
MERS does not handle mortgage servicing or collect
payments from borrowers
MERS is not involved in the servicers process on loan
modifications, refinances or foreclosure decisions
MERS does not hold the notes, serve as a document
custodian or replace the county land records
100
Benefits of the MERS System

Helps prevent breaks in chain of title for liens
As mortgagee of record, MERS is served with all legal
notices affecting the real property and provides
notice via email to the MERS System member
servicing or owning the mortgage loan, lowering the
overall cost of mortgage servicing and lending.
Free resource for borrowers to locate and contact
their servicers and learn who owns their loan
Provides local officials with a free resource to identify
the party responsible for maintaining vacant
properties (>1,000 gov. subscribers)
101
Key Mortgage Provisions

DEFINITION: MERS is a separate corporation that is acting solely as a nominee for
Lender and Lenders successors and assigns. MERS is the mortgagee under this
Security Instrument.
TRANSFER OF RIGHTS IN THE PROPERTY:
For this purpose, Borrower does hereby mortgage, grant and convey to
MERS (solely as nominee for Lender and Lenders successors and assigns)
and to the successors and assigns of MERS the following described
property
Borrower understands and agrees that MERS holds only legal title to the
interests granted by Borrower in this Security Instrument, but, if
necessary to comply with law or custom, MERS (as nominee for Lender
and Lenders successors and assigns) has the right to foreclose and sell
the Property; and to take any action required of Lender including, but not
limited to, releasing and canceling this Security Instrument.
102
MERS System Basics

Registration vs. Recording: The MERS System is not
a legal system of record nor a replacement or
substitute for the public land records. All mortgages
naming MERS are recorded in the public land records
for priority and enforceability purposes.
Tracking vs. Transfer: The MERS System is a
tracking system; no interests are transferred on the
systemonly tracked.
103
Contact Info
Brian Blake, Esq.
Counsel
1818 Library Street
Reston, VA 20190
T: (703) 761-1275
F: (703) 748-0183
brianb@mersinc.org
HBOR and Recent Developments

in Californias Statutory Scheme
Regarding Nonjudicial Foreclosures
Hunter R. Eley, Esq.
Doll Amir & Eley LLP
1888 Century Park East, Ste. 1850
Los Angeles, California 90067
heley@dollamir.com
Preview of Presentation
I. The Importance of HBOR
II. The Fundamental Elements Of HBOR
III. HBORs Servicing Requirements

IV. Remedies Under HBOR
V. Trends In California Mortgage Litigation

106

Background
Californias Homeowner Bill of Rights (HBOR) was passed in July 2012 and became
effective on January 1, 2013.
Before HBOR was enacted, forty-nine (49) state attorneys general agreed to the
National Mortgage Settlement (NMS) with five (5) of the countrys largest
mortgage servicers.
The servicers agreed to provide $20 billion worth of mortgage-related relief to

homeowners and to abide by new servicing standards. However, under the NMS,
while attorneys general can sue noncompliant servicers, borrowers cannot.
The California Legislature passed HBOR to give borrowers a private right of action to
enforce protections like those provided in the NMS as to all servicers not just the
five (5) signatories to the NMS.
See Litigating Under the California Homeowner Bill of Rights & Nonjudicial Foreclosure Framework, California Homeowner Bill of Rights
Collaborative, October 2014 Newsletter, available at http://www.calhbor.org/wp-content/uploads/2014/10/Litigating-under-the-CaliforniaHomeowner-Bill-of-Rights-Nonjudicial-Foreclosure-Framework.pdf.; see also Too Many Choices: Navigating The Mortgage Servicing Maze,
California Homeowner Bill of Rights Collaborative, September 2014 Newsletter, http://calhbor.org/2014/09/12/september-newsletter-breaksdown-new-mortgage-servicing-comparison-chart/.
107

Ripple Effect
The CFPB issued rules on mortgage servicing which became

effective on January 10, 2014. Many similarities exist between
HBOR and the CFPB rules, including a prohibition against dual
tracking, increased notification requirements of loss mitigation
opportunities and the appointment of a single point of contact for
individuals interested in loss mitigation options.
In addition to California, Nevada, Minnesota and Colorado have

also passed legislation that prohibits dual tracking.
See Too Many Choices: Navigating The Mortgage Servicing Maze, California Homeowner Bill of Rights Collaborative, September 2014
Newsletter, http://calhbor.org/2014/09/12/september-newsletter-breaks-down-new-mortgage-servicing-comparison-chart/.; New Laws
Prohibiting Dual Tracking in the Foreclosure Context, NOLO, http://www.nolo.com/legal-encyclopedia/new-laws-prohibiting-dual-trackingthe-foreclosure-context.html.
108
II. Fundamental Elements of HBOR

A.
Broad Definition Of Servicers
Small Servicers Exception
National Mortgage Settlement Exception
B.
First Liens On Owner-occupied, One-to-four Unit Properties Only
C.
Borrowers
potentially eligibleforeclosure prevention alternative program
But Not:
o Surrendered
o Foreclosure Avoidance Scheme Participants
o Bankruptcy
109

A.
Broad Definition of Servicers
Mortgage servicer means a person or entity who directly services a loan, or who is responsible for interacting with
the borrower, managing the loan account on a daily basis including collecting and crediting periodic loan payments,
managing any escrow account, or enforcing the note and security instrument, either as the current owner of the
promissory note or as the current owner's authorized agent. Mortgage servicer also means a subservicing agent to
a master servicer by contract. Mortgage servicer shall not include a trustee, or a trustee's authorized agent, acting
under a power of sale pursuant to a deed of trust. Cal. Civ. Code 2920.5(a).
Small Servicers Exception: Notably, the primary enforcement provision section 2924.12 does not
apply to section to a depository institution chartered under state or federal law, a person licensed
pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section
50000) of the Financial Code, or a person licensed pursuant to Part 1 (commencing with Section 10000)
of Division 4 of the Business and Professions Code, that, during its immediately preceding annual
reporting period, as established with its primary regulator, foreclosed on 175 or fewer residential real
properties, containing no more than four dwelling units, that are located in California. Cal. Cal. Code
2924.12(j) and 2924.18(b).
NMS Exception: NMS-signatories that are NMS-compliant with respect to an individual borrower may
escape HBOR liability. Cal. Civ. Code 2924.12(g).
See Too Many Choices: Navigating The Mortgage Servicing Maze, California Homeowner Bill of Rights Collaborative, September 2014
Newsletter, http://calhbor.org/2014/09/12/september-newsletter-breaks-down-new-mortgage-servicing-comparison-chart/.
110
B.
First Lien On Owner-occupied, One-to-four Unit Properties
Unless otherwise provided, paragraph (5) of subdivision (a) of Section 2924,

and Sections 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, and
2924.18 shall apply only to first lien mortgages or deeds of trust that are
secured by owner-occupied residential real property containing no more
than four dwelling units. For these purposes, owner-occupied means that
the property is the principal residence of the borrower and is security for a
loan made for personal, family, or household purposes.
Cal. Civ. Code 2924.15 (a); see also Penermon v. Wells Fargo Bank, N.A., 2014
WL 2754596, at *7 (N.D. Cal. June 11, 2014) (Court held that HBOR, however,
is limited in that it only applies to foreclosures of first liens on owneroccupied, one-to-four unit properties).
111

C.
Borrowers
Borrower means any natural person who is a mortgagor or trustor and who is potentially
eligible for any federal, state, or proprietary foreclosure prevention alternative program
offered by, or through, his or her mortgage servicer. Cal. Civ. Code 2920.5 (c).
[B]orrower shall not include any of the following:
(A) An individual who has surrendered the secured property as evidenced by either a letter
confirming the surrender or delivery of the keys to the property to the mortgagee, trustee,
beneficiary, or authorized agent.
(B) An individual who has contracted with an organization, person, or entity whose primary business
is advising people who have decided to leave their homes on how to extend the foreclosure
process and avoid their contractual obligations to mortgagees or beneficiaries.
(C) An individual who has filed a case under Chapter 7, 11, 12, or 13 of Title 11 of the United States
Code and the bankruptcy court has not entered an order closing or dismissing the bankruptcy
case, or granting relief from a stay of foreclosure.
Cal. Civ. Code 2920.5 (c); see also Colom v. Wells Fargo Home Mortgage, Inc., 2014 WL
5361421, at *2 (N.D. Cal. Oct. 20, 2014) (Court dismisses HBOR claim because at the time
alleged, the plaintiff had a Chapter 13 bankruptcy petition pending).
112
III. HBOR Servicing Requirements

A. Pre-Foreclosure Contact
B.
Foreclosure Prevention Alternatives
C.
No Dual Tracking!
113

A. Pre-Foreclosure Contact
SCRA notice (Cal. Civ. Code 2923.55)
Notice of right to request documents, such as the note, deed of trust, assignments,
and pay history (Cal. Civ. Code 2923.55)
Borrower contact efforts completed at least 30 days before recording NOD
In person or by telephone:
1.
2.
3.
Assess financial condition;

Discuss alternatives to foreclosure; and
Advise of HUD counseling and right to follow-up meeting within fourteen (14) days.
OR
Due Diligence
1.
2.
3.
Letter with HUD number;

Three (3) calls on different days and at difference times; and
Certified letter with toll free number and informational website two (2) weeks after calls, if no
response received
Declaration of contact or due diligence recorded with NOD

114

A. Pre-Foreclosure Contact Contd
Failure to Contact
Factual Issue: Intengan v. BAC Home Loans Servicing LP, 214 Cal.App.4th 1047 (1st Dist.,
Div. 5 2013) (State court will not take judicial notice of compliance in notice of default);
but see, Aghajanyan v. Greenpoint Mortg. Funding, 2014 WL 4748277 (C.D. Cal. Sept.
22, 2014) (US District Court takes judicial notice of compliance in notice of default).
Failure To Assess Financial Condition Properly or In Good Faith
Level Of Inquiry Not Set By Statute: Rosenfeld v. JP Morgan Chase Bank, N.A., 732
F.Supp.2d 952 (N.D. Cal. 2010) (Acknowledgement of inquiry into borrower condition
complies with statute); Cordero v. U.S. Bank, N.A., 2014 WL 4658757 (S.D. Cal. Sept. 17,
2014) (No requirement borrower be satisfied with the results of contact); Mosarah v.
SunTrust, 2012 WL 2117166 (E.D. Cal. June 11, 2012) (Contact does not require
assessment to be correct or in good faith).
Modification Discussion In Compliance: Brown v. U.S. Bancorp, 2012 WL 665900 (C.D.

Cal. Feb. 27, 2012) (Admission that loan modification discussed well before the notice of
115
default was recorded).
III. Servicing Requirements Under HBOR

B. Foreclosure Prevention Alternatives
1. What are the foreclosure prevention alternatives?

2. What servicer obligations arise?
Initial Communication
Single Point of Contact (SPOC)
Acknowledgement
Decision
Appeal
Material Change
116

1. What Are The Foreclosure Prevention Alternatives?
Foreclosure prevention alternative

means a first lien loan modification or another
available loss mitigation option.
Cal. Civ. Code 2920.5.
117

2. What Servicer Obligations Arise? Initial Communication
Timing Five (5) Days After Recording NOD
A mortgage servicer that offers one or more foreclosure prevention alternatives shall
send a written communication to the borrower that includes all of the following
information:
(1) That the borrower may be evaluated for a foreclosure prevention alternative or, if
applicable, foreclosure prevention alternatives.
(2) Whether an application is required to be submitted by the borrower in order to be
considered for a foreclosure prevention alternative.
(3) The means and process by which a borrower may obtain an application for a foreclosure
prevention alternative.
Unless, the borrower has previously exhausted the first lien loan modification process.
118

2. What Servicer Obligations Arise? Appointing SPOC

According to section 2923.7(a), upon request from a borrower who requests a foreclosure
prevention alternative, the mortgage servicer shall promptly establish a single point of contact
and provide to the borrower one or more direct means of communication with the single point
of contact.
Penermon v. Wells Fargo Bank, N.A., 2014 WL 2754596, at *12 (N.D. Cal.
June 11, 2014) (Court holds that a plain reading of the statute requires
Wells Fargo to assign a SPOC when a borrower requests a foreclosure
prevention alternative. It does not require a borrower to specifically request
a SPOC).
Diamos v. Specialized Loan Servicing LLC, No. 13-CV-04997 NC, 2014 WL

5810453, at *4 (N.D. Cal. Nov. 7, 2014) (court dismisses section 2923.7 claim
because plaintiff does not allege that she made a request for a SPOC.)
119

2. What Servicer Obligations Arise? Appointing SPOC
According to section 2923.7(b), the single point of contact shall be responsible for doing all of the following:
(1) Communicating the process by which a borrower may apply for an available foreclosure prevention
alternative and the deadline for any required submissions to be considered for these options.
(2) Coordinating receipt of all documents associated with available foreclosure prevention alternatives and
notifying the borrower of any missing documents necessary to complete the application.
(3) Having access to current information and personnel sufficient to timely, accurately, and adequately inform
the borrower of the current status of the foreclosure prevention alternative.
(4) Ensuring that a borrower is considered for all foreclosure prevention alternatives offered by, or through,
the mortgage servicer, if any.
(5) Having access to individuals with the ability and authority to stop foreclosure proceedings when necessary.
According to section 2923.7(e), single point of contact means an individual or team of personnel each of whom
has the ability and authority to perform the responsibilities described in subdivisions (b) to (d), inclusive.
Johnson v. PNC Mortgage, 2014 WL 3962662, at *11 (N.D. Cal. Aug. 12, 2014) ([t]he single point of contact can be an
individual or a team).
120

2.
What Servicer Obligations Arise? Acknowledgment
When a borrower submits a complete modification application or any document in connection

with a modification application, the mortgage servicer shall provide written acknowledgment
of the receipt of the documentation within five (5) business days of receipt.
In its initial acknowledgment of receipt (within 5 days) of the loan modification application, the
mortgage servicer shall include the following information:
(1) A description of the loan modification process, including an estimate of when a

decision on the loan modification will be made after a complete application has been
submitted by the borrower and the length of time the borrower will have to consider an
offer of a loan modification or other foreclosure prevention alternative.
(2) Any deadlines, including deadlines to submit missing documentation, that would
affect the processing of a first lien loan modification application.
(3) Any expiration dates for submitted documents.

(4) Any deficiency in the borrower's first lien loan modification application.
121

2.
What Servicer Obligations Arise? Decision: Denial
Following the denial of a first lien loan modification application, the mortgage servicer shall send a written
notice to the borrower identifying the reasons for denial, including the following:
(1)
(2)
(3)
(4)
(5)
The amount of time from the date of the denial letter in which the borrower may request an
appeal of the denial of the first lien loan modification and instructions regarding how to appeal the
denial.
If the denial was based on investor disallowance, the specific reasons for the investor disallowance.
If the denial is the result of a net present value calculation, the monthly gross income and property
value used to calculate the net present value and a statement that the borrower may obtain all of
the inputs used in the net present value calculation upon written request to the mortgage servicer.
If applicable, a finding that the borrower was previously offered a first lien loan modification and
failed to successfully make payments under the terms of the modified loan.
If applicable, a description of other foreclosure prevention alternatives for which the borrower
may be eligible, and a list of the steps the borrower must take in order to be considered for those
options. If the mortgage servicer has already approved the borrower for another foreclosure
prevention alternative, information necessary to complete the foreclosure prevention alternative.
Cal. Civ. Code 2923.6(f)
122

2.
What Servicer Obligations Arise? Decision: Approval
(a) If a foreclosure prevention alternative is approved in writing prior to the recordation of a notice of default, a
mortgage servicer shall not record a notice of default under either of the following circumstances:
(1) The borrower is in compliance with the terms of a written trial or permanent loan modification,
forbearance, or repayment plan.
(2) A foreclosure prevention alternative has been approved in writing by all parties, including, for
example, the first lien investor, junior lienholder, and mortgage insurer, as applicable, and proof of funds
or financing has been provided to the servicer.
(b) If a foreclosure prevention alternative is approved in writing after the recordation of a notice of default, a
mortgage servicer shall not record a notice of sale or conduct a trustee's sale under either of the following
circumstances:
(1) The borrower is in compliance with the terms of a written trial or permanent loan modification,
forbearance, or repayment plan.
(2) A foreclosure prevention alternative has been approved in writing by all parties, including, for
example, the first lien investor, junior lienholder, and mortgage insurer, as applicable, and proof of funds
or financing has been provided to the servicer.
Cal. Civ. Code 2924.11.123

2.
What Servicer Obligations Arise? Appeal
If the borrowers application for a loan modification is denied, the borrower shall
have at least thirty (30) days from the date of the written denial to appeal the
denial and to provide evidence that the mortgage servicers determination was in
error.
Cal. Civ. Code 2923.6(d).
124

2.
What Servicer Obligations Arise? Material Change
In order to minimize the risk of borrowers submitting multiple applications for first lien loan
modifications for the purpose of delay, the mortgage servicer shall not be obligated to evaluate
applications from borrowers who have already been evaluated or afforded a fair opportunity to
be evaluated for a first lien loan modification prior to January 1, 2013, or who have been
evaluated or afforded a fair opportunity to be evaluated consistent with the requirements of this
section, unless there has been a material change in the borrower's financial circumstances since
the date of the borrower's previous application and that change is documented by the borrower
and submitted to the mortgage servicer. Cal. Civ. Code 2923.6(g).
Williams v. Wells Fargo Bank, NA, 2014 WL 1568857, at *5 (C.D. Cal. Jan. 27, 2014) (Court found
that a letter stating Mr. and Mrs. Williams' gross disposable household income is approximately
$12,000 per month, and the borrowers have also been faced with an increase in their expenses.
As a result, Mr. and Mrs. Williams have had a material change in their financial circumstances and
would qualify for a modified monthly mortgage payment was insufficient to trigger the
exception of a material change).
125

C. No Dual Tracking
If a borrower submits a complete application for a first lien loan modification offered by, or
through, the borrowers mortgage servicer, a mortgage servicer shall not record a notice of
default or notice of sale, or conduct a trustee's sale, while the complete first lien loan
modification application is pending. A mortgage servicer shall not record a notice of
default or notice of sale or conduct a trustee's sale until any of the following occurs:
(1) The mortgage servicer makes a written determination that the borrower is not eligible
for a first lien loan modification, and any appeal period pursuant to subdivision (d) has
expired.
(2) The borrower does not accept an offered first lien loan modification within 14 days of
the offer.
(3) The borrower accepts a written first lien loan modification, but defaults on, or
otherwise breaches the borrower's obligations under, the first lien loan modification.
Cal Civ. Code 2923.6(c).
126

C. No Dual Tracking
A borrowers application shall be deemed to be complete when a borrower has supplied the
mortgage servicer with all documents required by the mortgage servicer within the reasonable
timeframes specified by the mortgage servicer. Cal. Civ. Code 2924.10.
Shapiro v. Sage Point Lender Servs., 2014 WL 5419721, at *5 (C.D. Cal. Oct. 24, 2014) (Court
denied motion to dismiss finding allegations of application sufficient where plaintiff alleged that
when he called to ask which documents were missing, a representative told [him] to disregard
the second letterwhich stated documents were missing. The representative also told [him] that
RCS had received the documents and was reviewing the application.)
Penermon v. Wells Fargo Bank, N.A., 2014 WL 2754596, at *11 (N.D. Cal. June 11, 2014) (Court
granted motion to dismiss as to this claim holding that according to the allegations in the
complaint, Wells Fargo never responded to Plaintiff's application at all, and, thus, did not notify
Plaintiff that the application was incomplete or that the application was not otherwise
considered by Wells Fargo for modification. Plaintiff must, nevertheless, amend to clearly plead
that the application that was submitted was a complete application, as required by
2923.6(h).) (emphasis added).
127
Injunctive Relief
Actual Damages
3x Actual Damages or $50,000
Attorneys Fees and Costs - Prevailing Party
Cure Provision ( 2924.12(c))
128

Injunctive Relief When A Trustees Deed Upon Sale Has Not Been Recorded
If a trustee's deed upon sale has not been recorded, a borrower may bring an action for injunctive relief to
enjoin a material violation of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17. Cal.
Civ. Code 2924.12(a)(1).
Any injunction shall remain in place and any trustee's sale shall be enjoined until the court determines that
the mortgage servicer has corrected and remedied the violation or violations giving rise to the action for
injunctive relief. An enjoined entity may move to dissolve an injunction based on a showing that the
material violation has been corrected and remedied. Cal. Civ. Code 2924.12(a)(2).
Damages When A Trustees Deed Upon Sale Has Been Recorded
After a trustee's deed upon sale has been recorded, a mortgage servicer shall be liable to a borrower for
actual economic damages pursuant to Section 3281, resulting from a material violation of Section 2923.55,
2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17 by that mortgage servicer where the violation was not
corrected and remedied prior to the recordation of the trustee's deed upon sale. Cal. Civ. Code 2924.12
(b).
If the court finds that the material violation was intentional or reckless, or resulted from willful misconduct
by a mortgage servicer the court may award the borrower the greater of treble actual damages or statutory
damages of fifty thousand dollars ($50,000). Cal. Civ. Code 2924.12(b).
Colom v. Wells Fargo Home Mortgage, Inc., No. C-14-2410 MMC, 2014 WL 5361421, at *2 (N.D. Cal. Oct. 20, 2014)
(Court dismisses HBOR claim because plaintiff fails to allege any facts to support a finding that the conduct
alleged constituted a material violation).
129

Attorneys Fees and Costs
A court may award a prevailing borrower reasonable attorney's fees and costs in
an action brought pursuant to this section. A borrower shall be deemed to have
prevailed for purposes of this subdivision if the borrower obtained injunctive
relief or was awarded damages pursuant to this section.
Cal. Civ. Code 2924.12(i).
Pearson v. Green Tree Servicing, LLC, 2014 WL 6657506, at *4 (N.D. Cal. Nov. 21, 2014)
(Permits plaintiff to make a motion for attorneys fees and costs because plaintiff prevailed
on obtaining a preliminary injunction).
Gonzales v. Citimortgage, No. C-14-4059 (N.D. Cal. Oct. 10, 2014) (Preliminary
injunction was granted because a foreclosure delay pales in comparison to
borrowers potential loss).
130
Remedies Under HBOR

Cure Provision
A mortgage servicer shall not be liable for any violation that it has corrected and remedied
prior to the recordation of a trustee's deed upon sale
Cal. Civ. Code 2924.12(c).
Vasquez v. Bank of Am., N.A., 2013 WL 6001924, at *7 (N.D. Cal. Nov. 12, 2013)
(Plaintiff may not seek remedies under Section 2924.12 that do not apply to the
present status of the property).
Jent v. N. Trust Corp., 2014 WL 172542, at *5 (E.D. Cal. Jan. 15, 2014) (Holding that
section 2924.12(c) precludes liability under California's non-judicial foreclosure
statutory scheme when the notice of default was rescinded and no trustees
deed upon sale had been recorded).
Leonard v. JP Morgan Chase, No. 34-2014-00159785-CU-OR-GDS (Cal. Super. Ct.

Sacramento Cnty. Oct. 21, 2014) (Violation was not corrected when the notice of
trustees sale was rescinded, but the notice of default was not).
131
Summary of HBOR Takeaways
Rise in servicing claims, which are more likely to survive pleading challenges
Does HBOR apply?
PACER Search For Bankruptcy
First Lien On Residential Property
Status Of Foreclosure
Previous Foreclosure Prevention Alternative Decision
Early Factual Analysis is Critical!
Review Servicing Notes
Review Incoming/Outgoing Correspondence
Completed Loan Modification Application?
Decision?
Appeal ?
Early Analysis of whether to rescind the NOD

132
More mortgage claims are surviving

challenges to the pleadings, including
the following:
1. Servicing claims
2. Fraud in the origination claims
3. Negligence claims
4. Glaski
133
V. Trends In California Mortgage Litigation:

1. Servicing Claims
Since many HBOR claims are fact-intensive, plaintiffs often are able to craft pleadings meant to
survive a demurrer or motion to dismiss. A few common allegations by borrowers are:
Dual-tracking i.e. recording a Notice of Default while borrower had a completed

loan mod application pending in violation of Cal. Civ. Code 2923.6.
Failure to assign a SPOC, or failure of the SPOC to fulfill its duties In well-pleaded
complaints, borrowers allege dates and times that they tried, but were unable to,
speak with someone who could provide accurate information about their application.
Failure to reconsider a borrowers application where there has been a material

change in the borrower's financial circumstances borrowers can plead this by
alleging that they submitted supporting documentation but that (a) it was not
considered, or (b) they were denied but should not have been.
Failure to advise borrower of options to avoid foreclosure and to provide other

required information in violation of Cal. Civ. Code 2923.55.
134

2. Fraud in the Origination Claims
A 2013 California Supreme Court opinion, Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Association,
55 Cal. 4th 1169 (2013), opened the door to more claims based on a promissory fraud theory.
Prior to Riverisland: Lenders often challenged claims arising out of representations made at or before
origination by arguing that any agreement between the parties was required to be in writing under the
statute of frauds. In Riverisland the Court expressly overruled a large body of case law that began with its
own 1935 decision in Pendergrass.
Facts of Riverisland: Borrowers fell behind in loan payments and restructured their debt with their lender.
They alleged that prior to signing the agreement, the lender told them that they would have two years to
catch up on their payments and that the only additional collateral included consisted of two ranches. In
reality, the agreement provided only a 3-month extension and included eight parcels of land as additional
collateral. The borrowers did not read the agreement before signing.
Key Points:
Under Riverisland, [a] fraud action is not barred when the allegedly fraudulent promise is
unenforceable under the statute of frauds.
The Court explained that [e]vidence to prove that the instrument is void or voidable for mistake,
fraud, duress, undue influence, illegality, alteration, lack of consideration, or another invalidating cause
is admissible.
135

2. Fraud in the Origination Claims Contd
Impact of Riverisland:
The Court itself downplayed the reach of Riverisland, emphasizing that the
statute of frauds still exists and promissory fraud remains difficult to establish on
the merits because plaintiffs must prove the lender had intent not to perform,
not just an un-kept promise.
As expected, we are now seeing promissory fraud claims (including those

involving loan origination) survive the pleadings.
In the Court of Appeals words: In the post-Riverisland world, parties would be

better served in addressing the heightened burden of proving fraud in a civil
action. Fraud demands specialized pleading. Credibility of the parties who
negotiated the agreement and their relative bargaining positions will be
assessed. Attention will now focus on the justifiable reliance element of fraud.
Julius Castle Restaurant Inc. v. Payne, 216 Cal. App. 4th 1423, 1441-42 (2013)
(internal citations omitted).
136

3. Negligence Claims
In Alvarez v. BAC Home Loans Servicing, L.P., 228 Cal. App.

4th 941 (2014), the Court found that a creditor owes a
borrower a duty of care when it agrees to review a loan
modification application, despite the general rule that a
financial institution owes a borrower no duty of care. Id. at
949. Further, the Court held that the duty was breached
based on conduct regulated by HBOR, despite the fact that
HBOR did not apply to the action. Id. at 951.
137

4. Glaski
Last year lenders and servicers took notice of the California Court of Appeals opinion in Glaski v.
Bank of America, N.A., 218 Cal. App. 4th 1079 (2013).
In Glaski, the plaintiff alleged that a transfer of a mortgage to a securitized trust occurred after
the trust closed and, as such, there was no transfer. This is an allegation that many California
courts had rejected, including on standing grounds. Glaski held that a borrower had standing to
allege violations of a pooling and servicing agreement or PSA between his lender and a third
party trust where he alleged an assignment was void (as opposed to voidable).
Many lenders feared that Glaski would open the floodgates to wrongful foreclosure and other
claims based on PSA-related challenges.
Fortunately, Glaski has been widely criticized and numerous courts have rejected it outright.
Kan v. Guild Mortg. Co., 230 Cal. App. 4th 736 (2014) (dismissing wrongful foreclosure claim and
holding that a borrower does not have standing to allege an assignment violated PSA prior to a
foreclosure sale); Yvanova v. New Century Mortgage Corp., 226 Cal. App. 4th 495, 502 (2014),
review granted and opinion superseded sub nom. Yvanova v. New Century Mortgage Corp., 331
P.3d 1275 (Cal. 2014)(no California court has followed Glaski on this point, and many have
pointedly rejected it) (collecting cases); Diunugala v. JP Morgan Chase Bank, N.A., 2013 WL
5568737 (S.D. Cal. Oct. 3, 2013) (disagreeing with the reasoning in Glaski and dismissing state138
law claims concerning a foreclosure).
Please do not hesitate to contact me with any questions at:

Hunter R. Eley, Esq.
Doll Amir & Eley LLP
1888 Century Park East, Ste. 1850
Los Angeles, California 90067
heley@dollamir.com
(310) 557-9100
139

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Hot Issues in Foreclosure Litigation:

(c) An action to foreclose a mortgage.

Statute of Repose, Fla. Stat. 95.281

Landmark: Singleton v. Greymar

Cite: 882 So.2d 1004 (Fla. 2004)

Singletons Progeny: U.S. Bank v. Bartram

Cite: 140 So. 3d 1007 (Fla. 5th DCA 2014)

Cite: 143 So. 3d 954 (Fla. 4th DCA 2014).

Unresolved Issues Part II

Can you recover the time-barred payments in a subsequent foreclosure action

Substance v. Procedure. Even where the statute of limitations has expired,

The Business Records Exception

Exception to Hearsay Rule for Records of Regularly Conducted

Landmark: WAMCO XXVIII, LTD. V. Integrated

Cite: 903 So.2d 903 (Fla. 2d DCA 2005)

Distinguishing WAMCO: Hunter v.

Cite: 137 So. 3d 570 (Fla. 1st DCA 2014)

Burdshaw v. Bank of New York Mellon

Holt v. Calchas, LLC

Possible Solutions for the Prior Servicer

WAMCO: whenever possible, testimony that a record is the business record of

Possible Solutions for the Prior Servicer

Certification by the prior servicer under Fla. Stat. 90.902(11):

Subpoenaing the prior servicer for trial: This is time consuming

Loss Mitigation Litigation Trends

Your Logo here

Attorneys Soliciting Clients for Loan

Emergency Economic Stabilization

Early Loan Modification Litigation

Miller v. Chase Home Fin., LLC, 677 F.3d 1113, 1116

No claims as third-party beneficiaries to

Morales v. Chase Home Fin. LLC, 2011 U.S. Dist. LEXIS

Early HAMP Litigation - No Breach

Even if satisfied TPP conditions, borrower

Shift in Loan Mod LitigationThe Wigod Decision

breach of contract, promissory estoppel, fraudulent

Olson v. Merrill Lynch Credit Corp., 576 Fed. Appx

Wigod Opened Door for

Breach of Contract TPP Executed?

An invitation to apply for a TPP does not

Breach of Contract All Conditions Satisfied?

No If borrower did not have a financial

Breach of Contract Servicers Signature

Breach of Contract Consideration

Providing documents is not sufficient

Failing to send permanent modification agreement before

Breach of Contract - Damages

No Subject to maintaining requirements

Breach of Duty of Good Faith and

Because servicer told borrower it would

Breach of Duty of Good Faith and

Servicer not motivated by a desire to gain an

Breach of Fiduciary Duty - No Duty

Sufficient facts not alleged to show how

Reliance Undertook no other loss

Inconvenience and agitation caused by loan

But heightened pleading standard has been